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Evercore (EVR) Q2 Earnings Beat on Higher Revenues, Stock Dips
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Evercore Inc.’s (EVR - Free Report) second-quarter adjusted earnings per share of $1.81 surpassed the Zacks Consensus Estimate of $1.66. Also, the bottom line compared favorably with the prior-year quarter’s reported figure of 96 cents.
Results benefited from an increase in revenues generated from the Investment Management and Investment Banking & Equities segments. Further, an improvement in assets under management (AUM) balance was another positive. However, the rise in expenses was a woe.
Shares of Evercore fell 3.2% following the release of its second-quarter results.
Net income attributable to common shareholders (GAAP basis) was $73.8 million, which surged 98.2% from the year-ago quarter.
Revenues & Expenses Rise
In the second quarter of 2024, total revenues of $693.4 million beat the Zacks Consensus Estimate of $620.4 million. Further, the top line increased 37.7% year over year.
On an adjusted basis, net revenues came in at $695.3 million, up 37.6% year over year.
Total expenses increased 31.5% to $581 million. This was mainly due to a rise in all the components of total expenses.
The adjusted compensation ratio was 66%, down from the prior-year quarter’s 67%.
Adjusted operating margin was 16.4%, up from the prior-year quarter’s 12.6%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 38.9% year over year to $670 million. This rise was primarily due to an increase in advisory fees and commissions and related revenues. Also, operating income surged 92.3% to $78.9 million.
Investment Management: Net revenues were $19.2 million, up 11.9% from the prior-year quarter’s reported figure. Operating income was $4.6 million, up 20.6% from the year-ago quarter.
AUM was $13.2 billion as of Jun 30, 2024, up 14.6% year over year.
Balance Sheet Position
As of Jun 30, 2024, cash and cash equivalents were $631.6 million and investment securities and certificates of deposit were $1.1 billion. Moreover, current assets exceeded current liabilities by $1.6 billion as of the same date.
Capital Distributions Activities
On Jul 23, the company declared a quarterly dividend of 80 cents per share. The dividend will be paid on Sep 13, 2024, to common stockholders on record as of Aug 30.
In the reported quarter, Evercore repurchased 0.3 million shares at an average price of $186.36.
Our Viewpoint
The company's focus on boosting its client base in advisory services has contributed to its revenue growth. Given Evercore’s decent liquidity position, capital distribution activities seem sustainable. However, a rising expense base is likely to impede the bottom-line growth in the near term.
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2024 adjusted earnings per share of $1.76 beat the Zacks Consensus Estimate of $1.69. Also, the bottom line reflected a rise of 33.3% from the prior-year quarter.
Results were primarily aided by an increase in revenues. IBKR recorded growth in customer accounts during the quarter, which, along with a rise in daily average revenue trades, was another tailwind. However, marginally higher expenses hurt the results to some extent.
Charles Schwab’s (SCHW - Free Report) second-quarter 2024 adjusted earnings of 73 cents per share met the Zacks Consensus Estimate. The bottom line, however, declined 3% from the prior-year quarter.
SCHW’s results benefited from the solid performance of the asset management business, which drove the revenues. The absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, higher funding costs posed a major headwind. The company also recorded a rise in adjusted expenses.
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Evercore (EVR) Q2 Earnings Beat on Higher Revenues, Stock Dips
Evercore Inc.’s (EVR - Free Report) second-quarter adjusted earnings per share of $1.81 surpassed the Zacks Consensus Estimate of $1.66. Also, the bottom line compared favorably with the prior-year quarter’s reported figure of 96 cents.
Results benefited from an increase in revenues generated from the Investment Management and Investment Banking & Equities segments. Further, an improvement in assets under management (AUM) balance was another positive. However, the rise in expenses was a woe.
Shares of Evercore fell 3.2% following the release of its second-quarter results.
Net income attributable to common shareholders (GAAP basis) was $73.8 million, which surged 98.2% from the year-ago quarter.
Revenues & Expenses Rise
In the second quarter of 2024, total revenues of $693.4 million beat the Zacks Consensus Estimate of $620.4 million. Further, the top line increased 37.7% year over year.
On an adjusted basis, net revenues came in at $695.3 million, up 37.6% year over year.
Total expenses increased 31.5% to $581 million. This was mainly due to a rise in all the components of total expenses.
The adjusted compensation ratio was 66%, down from the prior-year quarter’s 67%.
Adjusted operating margin was 16.4%, up from the prior-year quarter’s 12.6%.
Quarterly Segmental Performance (GAAP Basis)
Investment Banking & Equities: Net revenues increased 38.9% year over year to $670 million. This rise was primarily due to an increase in advisory fees and commissions and related revenues. Also, operating income surged 92.3% to $78.9 million.
Investment Management: Net revenues were $19.2 million, up 11.9% from the prior-year quarter’s reported figure. Operating income was $4.6 million, up 20.6% from the year-ago quarter.
AUM was $13.2 billion as of Jun 30, 2024, up 14.6% year over year.
Balance Sheet Position
As of Jun 30, 2024, cash and cash equivalents were $631.6 million and investment securities and certificates of deposit were $1.1 billion. Moreover, current assets exceeded current liabilities by $1.6 billion as of the same date.
Capital Distributions Activities
On Jul 23, the company declared a quarterly dividend of 80 cents per share. The dividend will be paid on Sep 13, 2024, to common stockholders on record as of Aug 30.
In the reported quarter, Evercore repurchased 0.3 million shares at an average price of $186.36.
Our Viewpoint
The company's focus on boosting its client base in advisory services has contributed to its revenue growth. Given Evercore’s decent liquidity position, capital distribution activities seem sustainable. However, a rising expense base is likely to impede the bottom-line growth in the near term.
Evercore Inc Price, Consensus and EPS Surprise
Evercore Inc price-consensus-eps-surprise-chart | Evercore Inc Quote
Currently, Evercore carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance
Interactive Brokers Group’s (IBKR - Free Report) second-quarter 2024 adjusted earnings per share of $1.76 beat the Zacks Consensus Estimate of $1.69. Also, the bottom line reflected a rise of 33.3% from the prior-year quarter.
Results were primarily aided by an increase in revenues. IBKR recorded growth in customer accounts during the quarter, which, along with a rise in daily average revenue trades, was another tailwind. However, marginally higher expenses hurt the results to some extent.
Charles Schwab’s (SCHW - Free Report) second-quarter 2024 adjusted earnings of 73 cents per share met the Zacks Consensus Estimate. The bottom line, however, declined 3% from the prior-year quarter.
SCHW’s results benefited from the solid performance of the asset management business, which drove the revenues. The absence of fee waivers and solid brokerage account numbers acted as tailwinds during the quarter. However, higher funding costs posed a major headwind. The company also recorded a rise in adjusted expenses.